Access to Finance and Growth of Small and Medium Scale Enterprises in the Sissala East Municipality

Abstract

ABSTRACT Over the years, Small and Medium Enterprises ( SMEs) have been vital economic development agents. Despite their dominant share in the business industry, Small and Medium Enterprises worldwide are hampered by constrained growth. Access to finance has been identified as a dominant constraint facing SMEs. In Ghana, governments at a different level have put up many support programs to promote and sustain their development. However, Despites and all these supports, Micro and small scale enterprises (SMEs) in Ghana have not performed creditably well. This study intends to examine the precursors or antecedents of access to finance and the impact of access to finance on the growth of SMEs in Sissala East Municipality, Ghana. The study's goal was to examine the impact of access to finance on the growth of SMEs in the Sissala East Municipality. The study adopted the positivist philosophy. The study adopted a quantitative research approach to analysing the primary data that was collected. The study adopted the explanatory design of the quantitative approach. This study adopted the census approach, where every unit in a population is selected. A structured questionnaire was used for the primary data collection. The data gathered were cleansed, coded and inputted into SPSS 26.0 version for analysis. The need for collateral before getting credit, lack of understanding of business funding alternatives, and availability of business support services were the primary factors influencing or driving loan accessibility among SMEs. It was found that access to financial credit positively affects SMEs productivity. According to the findings, the Bank of Ghana (BoG) should establish a special rate for SMEs lower than the general interest rate on loans.